No unaffordability for renters: NZPIF

In a new report, it says New Zealand houses are 74% overvalued compared to rents, the third-worst out of the 23 nations surveyed, behind Canada and Hong Kong.

Compared to incomes, houses were 30% overvalued, fourth behind Canada, Australia and Belgium.

New Zealand’s house prices were also some of the fastest growing in the world, up 7.3% over a year, the sixth fastest.

But the New Zealand Property Investors Federation said there was no affordability crisis for renters. 

It cited a Massey University study that showed affordability in only three of the country’s 12 regions had deteriorated: Auckland, Canterbury and Queenstown Lakes.

NZPIF executive officer Andrew King said it was still cheaper to rent than to own properties.

But he said things could get worse for tenants if tax changes were introduced.

King said NZPIF figures showed the cost increases of the Labour policies of ring-fencing losses on rental properties and capital gains tax on the average rental property would be about $100 per week. Ring-fencing would have the largest impact.

"People need to realise that  the extra taxes being proposed are going to have a dramatic effect on a tenant’s ability to save a home deposit and will lead to overcrowding for many families.”

He said the arguments for a capital gains tax had focused on tax equality, increasing tax revenue and reducing house prices. But he said it would also affect rental prices.

“In deciding if it is worth asking tenants to pay this price, we need to carefully analyse the benefits expected to be gained through increased tax revenue and lower house prices.”